ECB QE 'tapering' prompts sharp rise in European bond yields

Potential for QE to be ended earlier than expected

German 10-year bunds are approaching a positive yields for the first time in two years as investors question whether the European Central Bank is considering ending its €80m monthly bond purchase programme.

According to the Financial Times, the central bank is believed to be considering ending the programme earlier than expected. It had previously been set to finish in March 2017. The ECB has denied the reports, which originally came from Bloomberg, and said the topic is not being discussed, but it failed to stop yields rising in bond markets. Yields on 10-year government bonds in Germany, France, Italy and Spain all rose around 4bps in the space of an hour and have continued to rise. However, the moves have been less dramatic than the 2013 'taper tantrum' when the Federal Reserve rev...